SRP board members weighing benefits of data center moratorium
Salt River Project board members are considering whether the utility should pause new data center interconnection agreements as projected demand threatens to drive major infrastructure costs. Utility staff said state law generally requires SRP to serve eligible customers, limiting its ability to impose a moratorium, while board members questioned whether residential customers could bear the risks and costs.
Salt River Project board members consulted utility staff about potentially curtailing new data center interconnection agreements amid unprecedented forecasts for electricity demand in the Phoenix area. Officials said roughly 3,000 of the utility’s planned 4,700 megawatts of added capacity by 2035 could serve data centers, raising concerns about new generation, transmission, operations and maintenance costs.
Chief legal executive Michael O’Connor said state law likely prevents SRP from imposing a broad data center moratorium because the utility has an obligation to serve eligible customers in its exclusive territory, which includes parts of Mesa, Tempe and Chandler. Board members also questioned whether residential customers could be forced to subsidize the expansion, though financial strategy director John Tucker said new tariffs and upfront collateral requirements mean data centers are currently paying more than the cost of serving them. The board also briefly raised potential impacts on SRP’s water supplies before entering executive session.